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Issue with Cumulative method of Federal taxation- US payroll

Dec 15, 2016 at 03:54 AM

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Hello All,

My client is facing an issue with the standard cumulative method of federal taxation in processing class 68.

We are currently working with Wage type 1144- Pay/Performance Bonus. Previously for WT1144 the specification of PC 68 was set as '1' that is regular tax and now the client wants cumulative or aggregate method of tax which should take into consideration standard tax for the EE’s witholdings and martial status and combine it with the 25% supplemental tax and result in an average of the two. This should be a standard SAP configuration.

However if we change the specification of PC68 to '3' we are getting federal taxes that are taking all of the available amount from the wage type and leaving nothing to pay.

Please refer the below screen shots-

We tested an EE in sandbox with WT 1144 entered on 9/26/2016 for $500.00.

Here’s how her Paycheck appears after running the WT1144 with the cumulative method of tax.

Can anyone guide me with this. I want to understand the Cumulative method of payment of processing class 68. I couldn't find detailed explanation about it anywhere on SCN. Thanks in Advance..!!

Regards,

Pooja Jaisinghani

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